J.C. Penney: 'Don't Play Games With The Customer'

In February, J.C. Penney began a long transformation that includes eliminating hundreds of sales events in favor of everyday prices on most items, a transformation that many predict will rip the retailer to pieces in the marketplace. Especially because they also discontinued dividends to help fund this massive change. This is not the pretty picture CEO Ron Johnson depicts. However, Ron Johnson has had incredible success at major companies, starting with Target, onto Apple, and now with J.C. Penney. His success with Apple is a major contributing factor to the kinds of change going on at JCP.

How do you market the ending of sales and coupons? The new pricing structure at JCP is a drastic shift from what we are used to seeing at the retailer's many stores. So, instead of constant sales and coupons, J.C. Penney will have three levels of pricing: everyday, best price, (which are clearance items), and month-long value (where they discount certain themed items for a month). Comparatively competitive prices, even with most online competition, they hold the lowest price.Yet, the first quarter results proved to be poor as the company's stock price fell by 12.5 percent and customer traffic also fell by 10 percent.

"It's one big year we have to get through ... We are trying to essentially convert the Titanic into 1,100 wave runners, and that is really hard to do," CEO Ron Johnson said at the analyst meeting, in which vendors, like Martha Stewart, were present.

Recent controversy over spokesperson Ellen DeGeneres being a homosexual, got some pretty heavy media coverage, but can be looked at in a positive light. The company, rather than drop her because of public outcry, kept her on as the company's spokesperson. This sends a clear message of change at J.C. Penney, and one that should be readily accepted by Americans.

Here is a CBS interview with CEO Ron Johnson about the controversy, the transformation, his work, and the future of JCP.

http://www.youtube.com/watch?v=VfZKntQZSbo&feature=related


Although this change sounds good when Johnson speaks, it has not reached the ears of consumers. They will need a much stronger marketing strategy. I'm interested, and I love Ron Johnson's work, but I feel that without my preceding interest, I would have never heard of the new pricing at JCP. They need to get out there, in the media. This is a really cool change, and could be a revolution in retailing. Having, essentially, a "Mall of designers" in one store, is a pretty cool concept. Bringing products to customers, based on what they like, and providing it at a cost, based on what they want to pay, sounds commonsensical, but it is rarely seen in as pure a form as what JCP is trying to do. When you replace a tradition of coupons and sales with a no-haggle solid price, it isn't as fun for the involved consumer. However, in a noise-filled world, some straight and forward would be greatly appreciated. Designing a straight and forward marketing plan will be essential to their success with this new transformation.

Good luck JCP, good luck.

The Mountain Dew Show

In an attempt to battle recent loss in market share to competitors, like Fanta and Sprite, and a seven-year sales decline, Mountain Dew is looking for new audiences to help it maintain its position on top of the market.

Although the brand is America's best-selling non-cola soft drink, its target audience has remained fairly narrow. According to data from multiple sources on Mountain Dew, the majority of its consumers are white, suburban males located the in the Plain and Southeast regions of the United States. Therefore, they need a campaign that can facilitate that new growth in a geographically efficient way. The goal is to achieve revenue growth and solidify domination of the market. The company has chosen to bulk up its media buys and refocus its brand’s messaging to speak to new demographics while still providing a consistent message for its brand’s current advocates.

This new messaging can be seen in Mountain Dew’s most recent ad campaign. Focused on the slogan, “This is How We Dew”, the new advertisements use a crew of celebrities ranging from rapper Mac Miller to pro skateboarder Paul Rodriguez to speak to potential consumers. Mountain Dew has developed multiple spots, each being narrated by a different celebrity.  The company will air each celebrity’s commercial in a region of the country best suited to the celebrity’s niche. For example, commercials voiced by Lil’ Wayne will be focused on potential consumers in the LA market — whereas Jason Aldean’s ads will be aired in Nashville. This is exactly what they needed to capture these new audiences.

Here's two of the spots, Mentioned above. 

By effectively reaching these audiences, in a way that is consistent with their past messages, Mountain Dew hopes to spread across the country. How effective it will be, can only be measured in time. However, in my humblest of opinions, they are headed in the right direction. Creating messages for specific geographical areas is a really cool and effective way to direct specific messaging at a specific audience. This type of messaging/campaign will be seen more and more in our new global marketplace. Mountain Dew has got a good one here, I'll be keeping my eyes peeled for more companies using similar messaging techniques.

Smart move Dew. Smart move.